Mexico's Monex has created a bespoke product for one of its clients with a bullish outlook as a tester for a retail version.
The fully capital-protected six-week CD, Bullish Barrier IPC - 9% PA, is linked to the performance of the Mexican Bolsa IPC and offers a bonus return of 9% if the final level of the underlying is at or above 35,100. On the strike date, the initial reading of the regulator stood at 32,381.55. The issue size was MXN25M ($2.05m).
A source at the brokerage firm said the product had been created for a particular client to get a feel for how this structure would work in the current environment. The source also said that because of the volatility of the MXN/USD rate, an exchange rate used for the majority of its products, it was unable to meet the pricing on this favoured underlying and decided to offer a new payoff structure.
Monex has become more active as a provider of structured products in 2011: there are currently 248 products with a strike date in 2011, with an approximate sales figure of MXN4.241bn ($348m), almost a four-fold increase on 2010's issuance of 64 products.
Monex currently holds a market share of 11%, behind Santander, HSBC and BBVA.
This product appears in Recent Additions (Mexico).